Schroders 2009 Year End Results trusted heritage advanced thinking Data Pack
1 Contents Page Funds under management (FUM) 2 FUM by client domicile 3 Currency profile of FUM 4 FUM diversification 5 Asset Management business flows 10 Income and cost metrics for the Group 15 Net revenue and margins 16 Total costs 18 Key performance indicators 19 Headcount 23 Income statement progression 24 Balance sheet 26 Group capital 27 Movement in capital 28 Private equity interests 29 2010 Product ladder 30
Funds under management 148.4 billion at end December 2009 bn Institutional Intermediary Private Banking Total 31 December 2008 59.6 38.9 11.7 110.2 Net flows 4.9 9.6 0.5 15.0 Market movements, foreign exchange impact & other 12.2 10.6 0.4 23.2 31 December 2009 76.7 59.1 12.6 148.4 2
FUM by client domicile 95.5 billion funds under management from clients outside the UK UK 52.9bn North America 14.0bn South America 4.3bn Continental Europe 38.4bn Middle East 2.9bn Asia Pacific 35.9bn 7.7bn China joint venture China joint venture funds under management are not reported within Group funds under management 3
Currency profile of FUM Funds under management 148.4 billion 16% 5% 34% 4% 16% 25% GBP EUR USD JPY CHF Other 4
Total FUM by channel, region and product Funds under management 148.4 billion By channel 8% By region 12% By product 8% 52% 37% 16% 24% 48% 40% 13% 27% 15% Institutional Private Banking Intermediary UK Asia Pacific Continental Europe Equities Alternatives Private Banking Fixed Income Multi-asset Americas 5
Asset Management FUM by channel and product Intermediary FUM 59.1bn 12% Institutional FUM 76.7bn 15% 8% 48% 22% 58% 24% 13% Equities Multi-asset Fixed Income Alternatives 6
Asset Management FUM by channel and region Intermediary FUM 59.1bn 8% 25% Institutional FUM 76.7bn 18% 42% 36% 19% 31% UK Asia Pacific 21% Continental Europe Americas 7
Asset Management FUM analysis Equities FUM 71.1bn 17% 27% Fixed Income FUM 23.0bn 13% 28% 20% 32% UK 24% Asia Pacific Continental Europe Americas 39% 8
Alternatives breakdown Alternatives FUM 18.6bn 8% 6% 37% 22% 27% 9 Property Emerging market debt Private equity fund of funds Commodities Fund of hedge funds
Asset Management business flows 2008 2009 bn Inflows Outflows Net Inflows Outflows Net Institutional 11.7 (15.5) (3.8) 18.6 (13.7) 4.9 Intermediary (netted) 11.0 (17.2) (6.2) 17.4 (7.8) 9.6 Total Asset Management 22.7 (32.7) (10.0) 36.0 (21.5) 14.5 2008 2009 bn Inflows Outflows Net Inflows Outflows Net Institutional 11.7 (15.5) (3.8) 18.6 (13.7) 4.9 Intermediary (no-netting) 23.3 (29.5) (6.2) 29.0 (19.4) 9.6 Total Asset Management 35.0 (45.0) (10.0) 47.6 (33.1) 14.5 Intermediary historically reported as netted flows (same client flows within the same region within the same month) 10
Asset Management business flows Gross Inflows - bn 60 Net Flows - bn 15 50 10 40 5 30 0 20-5 10-10 0 2007 2008 2009-15 2007 2008 2009 Equities Multi-asset Fixed Income Alternatives 11
Intermediary flows 2009: gross inflows 21.0bn, net inflows 9.6bn bn sales flows 20 15 10 15.8 7.4 10.7 18.3 7.2 5 0-5 -10-15 -20 2.5-0.3-6.0-8.2-11.2-13.4-16.1 H1 2008 H2 2008 H1 2009 H2 2009 Gross sales Gross outflows Net sales 12 Gross inflows and outflows before netting..
Institutional flows 2009: gross inflows 18.6bn, net inflows 4.9bn bn sales flows 15 12.1 10 5 7.3 4.4 6.4 5.7 0-5 -1.1 ( -2.7-0.8-10 -8.4-7.1-7.2-6.4-15 H1 2008 H2 2008 H1 2009 H2 2009 Gross sales Gross outflows Net sales 13
Capitalising on strong demand in Continental Europe Leading active manager in mutual fund sales in 2009 bn 35 30 25 13.8 20 15 10 5 17.3 17.5 16.0 13.1 10.1 8.5 8.4 7.1 5.4 5.3 0 BlackRock + BGI Schroders Carmignac Deutsche Prudential Bluebay Franklin Templeton JP Morgan INVESCO Nordea 14 Source: Lipper, a Thomson Reuters company, FMI FundFile. European domiciled mutual fund sales (excluding money market funds) in 2009.
Income and cost metrics for the Group Compensation costs: operating revenues Bonus: pre-bonus Asset Management and Private Banking profit Group cost: operating revenues Return on average capital (pre-tax)* Return on average capital (post-tax)* Before exceptional items, except for * 2008 45% 36% 73% 7% 4% 2009 49% 45% 79% 8% 6% Compensation costs: operating revenues = total Group compensation costs divided by Asset Management and Private Banking net revenues Bonus: pre-bonus Asset Management and Private Banking profit = total Group bonus divided by prebonus Asset Management and Private Banking profit before tax Group cost: operating revenues = total Group costs divided by Asset Management and Private Banking net revenues Return on average capital (pre-tax) = total Group profit before tax divided by average capital Return on average capital (post-tax) = total Group profit after tax divided by average capital 15
Net revenue and margins Asset Management Asset Management net revenue 679.2 million (2008: 748.7 million) Q4 2008 Q4 2009 FY 2008 FY 2009 AM net revenue - m 171.2 229.1 748.7 679.2 Average AM FUM - bn 101.1 131.3 113.9 109.5 AM net revenue on average AM FUM 68bps 70bps 66bps 62bps AM performance fees - m 33.3 27.8 50.7 34.5 AM Performance fees on average AM FUM 13bps 8bps 4bps 3bps AM costs - m 124.6 161.1 518.6 500.3 AM costs on average AM FUM 49bps 49bps 46bps 46bps AM operating profit - m 46.6 68.0 230.1 178.9 AM operating profit on average AM FUM 18bps 21bps 20bps 16bps All amounts are before exceptional items 16
Net revenue margin quarterly progression Excluding performance fees 104 100 101 61 64 63 66 66 70 92 92 55 58 59 55 81 81 81 60 62 59 61 61 63 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Asset Management Private Banking Combined 17
Total costs m 174.5 197.1 210.4 254.0 224.4 172.8 184.4 195.4 224.1 220.8 137.0 207.7 160.8 149.3 169.9 2005 2006 2007 2008 2009 Variable staff costs Fixed staff costs Non-staff costs 2008 & 2009 amounts are before exceptional items 18
Compensation costs: operating revenues 51% 47% 46% 45% 49% 2005 2006 2007 2008 2009 Total Group compensation costs divided by Asset Management and Private Banking net revenues 19
Bonus: pre-bonus Asset Management and Private Banking profit 42% 41% 41% 45% 36% 2005 2006 2007 2008 2009 20
Asset Management net new business by channel bn 9.6 8.8 3.8 4.9 (5.9) (8.0) (10.6) (3.8) (6.2) 2005 2006 2007 2008 2009 Institutional Intermediary 21
Group cost: operating revenue ratio 80% 79% 74% 71% 73% 2005 2006 2007 2008 2009 Total Group costs divided by Asset Management and Private Banking net revenue 2005 uses underlying profit adjusted for 20.4m gain on discontinued outsourcing project 22
Headcount 2,891 2,834 2,609 31 Dec 07 31 Dec 08 31 Dec 09 23
Income statement progression Asset Management profit before tax m Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Asset Management income 196.7 208.0 188.1 175.6 130.7 152.8 177.5 231.3 Asset Management costs (130.5) (136.1) (127.4) (124.6) (103.1) (114.1) (122.2) (160.9) Asset Management exceptionals (0.6) (0.8) (1.6) (15.7) (6.7) (5.5) (1.3) (3.8) Asset Management profit 65.6 71.1 59.1 35.3 20.9 33.2 54.0 66.6 24
Income statement progression Private Banking and Group profit before tax m Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Private Banking income 27.5 28.6 29.0 26.2 26.4 22.8 23.6 24.9 Private Banking costs (16.6) (17.2) (17.4) (20.4) (18.1) (16.2) (17.3) (26.0) Private Banking exceptionals - - - (1.5) - (0.4) - 0.4 Private Banking profit 10.9 11.4 11.6 4.3 8.3 6.2 6.3 (0.7) Group profit before exceptionals 0.8 12.1 (0.8) (11.1) 0.2 (4.5) (3.8) (3.8) Group exceptionals (35.1) (1.1) 8.1 (119.1) (17.2) (10.8) (12.9) (4.5) Group (loss)/profit (34.3) 11.0 7.3 (130.2) (17.0) (15.3) (16.7) (8.3) 25
Balance sheet m Intangible assets including goodwill Other non-current assets Current assets Non-current assets held for sale Assets backing unit-linked liabilities Total assets 31 Dec 2008 163.5 704.5 3,489.1 2.0 3,714.3 8,073.4 31 Dec 2009 141.9 768.6 3,670.1-5,708.0 10,288.6 Total equity* Non-current liabilities Current liabilities Unit-linked liabilities Total equity and liabilities 1,632.2 316.9 2,410.0 3,714.3 8,073.4 1,649.0 566.6 2,365.0 5,708.0 10,288.6 *Includes minority interests (Dec 2008: 0.3m; Dec 2009: 0.6m) 26
Group capital m Operating capital Cash and cash equivalents Liquid funds Fixed income Third party hedge funds Seed capital Private equity Other Group investment capital Total capital 31 Dec 2008 733 310 118 105 53 252 58 3 899 1,632 31 Dec 2009 590 276 532-19 141 90 1 1,059 1,649 27
Movement in capital m Opening balance Profit before tax Tax Dividends Other transactions with equity holders Net gains on AFS financial assets and amounts recycled through the income statement Net actuarial losses on defined benefit pension schemes Exchange differences Closing balance 2009 1,632.2 137.5 1.3 (84.9) 21.3 58.2 (69.6) (47.0) 1,649.0 28
Private Equity interests Schroders plc Investments (Total 72m) Carried interest SVG Capital plc Quoted Investment Trust SVIL Co-investment vehicle GP & LP Interests Permira and other funds Fund of Funds I, II, III, IV Stand-alone portfolio Other 18m 16m 8m 24m 6m Permira Funds I + II Other SV funds US, Canada, Japan, Sapphire Life Sciences, Asia Pacific (Total 18m) 29
2010: what products are we targeting? Managing switches, anticipating the next move by discretionary clients GOVERNMENT DEBT CORPORATE CREDIT HYBRID EQUITY Specialist Equity Schroder Products Thematic, Asian Equity TR, US SMID, Alpha + Equity European, UK, US, Asian, Emerging Markets, Global, QEP Yield / Dividend European Yield and Global Yield, Income Maximiser Short-term Govt Bond Corporate Bond Multi strategy credit Convertibles, Global High Yield Global Convertible, Asian Convertible Strategic Bond, Global High Yield Euro Bond, Euro Corporate Bond, UK Corporate Bond, Global Bond, Euro Short Term Bond, European Bond, Global Inflation Linked Euro Government Bond Liquidity Euro Liquidity, US Dollar Liquidity Dynamic multi-asset Alternatives Pension Plus, Global Balanced, DGF GAIA, Property, EMD, EED Source: Schroders 30
2010: what products are we targeting? Anticipating recovery in advisory / retail demand GOVERNMENT DEBT Liquidity Short-term Govt Bond CORPORATE CREDIT HYBRID EQUITY Corporate Bond Multi strategy credit Convertibles, Global High Yield Dynamic multi-asset Alternatives Yield / Dividend Equity Specialist Equity Schroder Products Thematic, Asian Equity TR, US SMID, Alpha + European, UK, US, Asian, Emerging Markets, Global, QEP European Yield and Global Yield, UK Income, Income Maximiser Global Convertible, Asian Convertible Strategic Bond, Global High Yield Euro Bond, Euro Corporate Bond, Global Bond, UK Corporate Bond, Euro Short Term Bond, European Bond, Global Inflation Linked Euro Government Bond Euro Liquidity, US Dollar Liquidity Pension Plus, Global Balanced, DGF GAIA, Property, EMD, EED Source: Schroders 31
Forward-looking statements These presentation slides contain certain forward-looking statements and forecasts with respect to the financial condition and results of the businesses of Schroders plc These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by those forward-looking statements and forecasts. Nothing in this presentation should be construed as a profit forecast 32